Many of us feel like we have been playing financial Jenga the last couple of years. When a federal grant is pulled here or a state allocation is pulled there, an organization’s entire funding tower could end up on shaky ground, especially if it was the largest or sole source of funding.
The question isn't whether your organization will face a funding cut. The question is whether you'll be ready when it happens. Many SourceLink affiliates and the entrepreneurship support organizations (ESOs) in their networks have discovered they are one pull away from a topple when political winds shift or local development priorities change.
Maria Meyers has spent 25 years watching this cycle repeat. As founder of SourceLink and executive director of the UMKC Innovation Center, she has seen funding fluctuate through recessions, administration changes, market shifts, and funder priority cycles.
"Since I've been in this role, we've watched funding ebb and flow," Maria said. "A lot of times that changes depending on the objectives of the people that have the money. So, whether it's federal, state, local, or private funding, they often change their priorities or their focus as time goes on."
The American Rescue Plan Act (ARPA) funds and other COVID-era dollars that pumped significant dollars into small business support pipelines have legally expired, for example.
"Those funds have gone away by law," Maria said. "They haven't been appropriated."
And because much of that federal money flowed into state coffers and then outward to business support organizations (BSOs) and their partners, the ripple effect has been significant. "Those monies are disappearing from there, which is why the states are doing less funding of these types of things right now as well."
Changes in government administrations add another layer. Every new administration, at every level of government, reconsiders funding priorities based on what it promised on the campaign trail. Maria notes that one of the current shifts is toward AI, both in terms of helping businesses integrate it operationally and in terms of workforce AI literacy.
"We saw the same things back when we were looking at getting people on the internet," she said, "and trying to really help entrepreneurs understand how to use that tool. AI is kind of the same way." For ESOs looking for where new federal dollars might flow, AI programming is worth a close look, she noted.
None of this, Maria emphasized, should be considered new. "It's a job," she said simply. "Trying to stay funded."
Maria places nonprofit funding in three categories: grants, sponsorships, and earned income. Most ESOs are heavily weighted toward grants, creating funding vulnerabilities. The organizations weathering funding challenges the best are the ones developing all three— and as an ongoing exercise rather than an emergency response.
Connection Makes Survival Possible
Wisconsin's Start in Wisconsin platform is an example of what happens when diversification hasn’t happened before a funding crisis hits. Operating under the umbrella of the Wisconsin Economic Development Corporation (WEDC), Start in Wisconsin provides entrepreneurs across the state with an online directory of business and networking resources, a calendar of events, and tools to find and connect with local support organizations.
When WEDC faced a $2 million budget shortfall, the agency had to make hard cuts. Start in Wisconsin, which WEDC licenses from SourceLink as its technology and business support platform, was on the chopping block. Ed Javier, WEDC's director of entrepreneurship and innovation, found himself staring down a funding gap with a tight window to act. The platform, and the statewide coalition of partners that relied on it, was facing an outright sunset.
"When your funding gets cut, you try to just dig anywhere you can," Ed said.
One thing that saved Start in Wisconsin was the infrastructure it built before the crisis hit. WEDC had organized the state's nine regions into a working consortium, with representatives from each region participating in monthly calls to share data, success stories, and updates. So, when Ed's team delivered the bad news that funding was running out, strong relationships were already in place and ready to be activated.
Those relationships and the group’s transparency led to a positive outcome.
During the consortium call in which Ed’s team delivered the bad funding news, a partner in the Milwaukee region mentioned she knew of a group of Milwaukee-area banks actively searching for a tool that could connect entrepreneurs with the resources they needed.
Start in Wisconsin was exactly that tool.
Several banks agreed to a sponsorship that would cover the cost of licensing and management expenses. The Wisconsin Technology Council stepped in as the contract administrator and central point of coordination on behalf of the group. The whole process, from initial conversation to signed contract, took more than six months, and SourceLink helped bridge the funding gap timeline by working through the plan with WEDC.
Keep in mind that the banks' motivation was mutually beneficial. Community Reinvestment Act (CRA) requirements give banks a regulatory incentive to invest in community development activities. Sponsoring a network that connects entrepreneurs to resources checks that box, so it was a natural win-win situation. The banks’ logos now appear on the Start in Wisconsin site, giving them visibility in the entrepreneurial ecosystem they're helping to sustain. And as Ed pointed out, those early-stage entrepreneurs are also potential future clients.
The takeaway is that any sponsorship conversation involving an ESO and a prospective sponsor must have a compelling benefit pitch. And, he notes that you need a central organization to manage the contract and payments when several sponsors are part of the same initiative. Having a statewide or regional organization such as the Wisconsin Technology Council that can serve as the single point of contact isn't a convenient “nice-to-have.” It's essential.
Above all, Ed emphasized, "Talk to your partners. Make sure people are aware."
KCSourceLink’s Growth Strategy
Meanwhile, nearly 600 miles to the southwest, KCSourceLink in Kansas City, Missouri, has been navigating its own funding challenges and contemplating how to help and train support organizations within its ecosystem to do the same.
When the federal government terminated a university center grant program through the U.S. Economic Development Administration, KCSourceLink was in the second year of a five-year award.
"By the time we lost the funding, we had kind of anticipated it," said Becca Castro, KCSourceLink's former senior director and network builder. "But you still, when it happens, it's like, oh my…"
KCSourceLink was fortunate to have a diversified funding structure already in place, consisting of a mix of federal, state, local, and philanthropic sources as well as some individual gifts. When the federal grant disappeared, the KCSourceLink team asked the local funders who had served as matching partners on the grant to maintain their contributions. Nearly all of them agreed.
"We plan to do the majority of [the deliverables] still, as long as you can keep your match going," Becca said they told funders. The team narrowed its scope on a few nonessential activities but kept the core work intact.
Protecting the core and letting nonessentials go aligns with Maria’s longstanding advice. "You want to understand your core work and you want to stay the course," she said. "You don't want to fundraise just to add another program if it doesn't make sense."
When a grant opportunity appears that would require building something outside an organization's mission, the six-week response window that most grants allow can make that temptation dangerous. "That's when you have to be really careful that you're not creating something new," Maria added.
Partnerships Can Drive Investment
On the grants front, Maria has seen a clear shift in what funders are looking for.
"Grantors right now are looking for partnerships as opposed to just funding one individual organization," she said. The implication for ESOs is direct: Partnering with a complementary organization—one that serves a step before or after your work—can make a grant application meaningfully stronger. A startup-focused ESO partnering with a growth-stage organization, or an early-stage tech program connecting with a more advanced accelerator, creates a continuum that some funders find more compelling than serving a single stage of business.
KCSourceLink has been workshopping the partnership-as-funding strategy approach with partner ESOs at its quarterly convenings. Becca describes different levels of partnership, from basic awareness (“I know what you do, you know what I do. We trust each other enough to share clients”) all the way to deep co-investment where the organizations jointly map their activities, outputs, and outcomes to identify gaps a complementary partner could provide and funders would find compelling.
"Thinking strategically about what do we have, what would make us even more compelling, and then what partner in the community has that? Then you put our two value propositions together. For a funder, if I'm really thinking in a much more choosy way of who I'm going to fund," Becca explained, "then this partnership is much more compelling than the two alone."
Both Becca and Maria push leaders to think beyond their usual peer network. Workforce development groups, social service nonprofits, and childcare organizations are all sectors that overlap with entrepreneurship more than most ESOs acknowledge.
Becca also mentioned another dimension to co-investment that can be overlooked: "Sometimes with grant work, you get to the end of a grant, and you're like, ‘Oh gosh, I need to spend [the rest of] this money. I could throw a little bit your way. Hey, you're putting on this event, I need to spend this $5,000. Can you use it?’" For organizations operating on tight margins, that kind of peer co-investment can make a real difference.
Expanding Your Sponsors
When it comes to sponsors, both Becca and Maria offer the same advice: Stop fishing in the same crowded pond. The major national and regional corporations known for entrepreneurship support get approached constantly. ESOs would be wise to broaden their pool of corporate prospects.
"Who are the mid-tier companies that have people who are entrepreneurs and understand—and maybe have taken advantage of some of the programs that you've offered already?" Maria asks. She notes that these companies have marketing budgets and often sponsor smaller community events. Yet in many cases, no one from the community’s entrepreneurial ecosystem has ever reached out.
If you do target the larger corporations, Maria noted they often fund through two channels: a foundation arm that operates like a grant-maker and a sponsorship budget tied to marketing and brand visibility. Understanding which door to knock on, and why, changes the ESO’s pitch.
One timing note that applies across all of this: Funding cycles are real and generally nonnegotiable. Sponsorship budgets at major corporations often lock in during the fourth quarter for the following year. Grants typically allow only about six weeks for applicants to respond.
"You have to get into the budget," Maria said. If you miss that window, you could be waiting another year.
Earned Income: The Underused Pillar
The third leg of the funding stool, earned income, is where many ESOs have the most untapped potential. It tends to also be the most unproven. Still, it could be an avenue for some.
Some ESOs charge a nominal amount for events or training, Maria said, noting that people are more apt to show up if there is a cost involved. But there are other paths to earned income that she encourages ESOs to consider.
"Are you offering services that somebody would pay for?" she asked. "And who might that be?" The answer doesn't always have to involve charging individual entrepreneurs, which some ESOs believe is a conflict with their mission to serve early-stage founders who can't afford fees. The more promising path is institutional: becoming a contracted training provider for a chamber of commerce, a workforce board, or another organization that wants to offer programming to its members.
"Could you find a chamber who wants to offer training to their group … or something like that?" Maria suggests. Virtual delivery, she noted, has expanded the geography of these opportunities considerably.
KCSourceLink has also seen at least one KC-area ESO experiment with a membership model that bundles coaching, programming, and advisory services into tiered memberships, including access to co-working space. Such a model gives founders consistent access and the ESO steady revenue. Although the concept is still being tested, it reflects the kind of structural thinking that moves an organization toward more diversified funding and away from pure grant dependency.
The Constant in Fundraising: Trusted Relationships
All of these strategies share a common precondition: creating and maintaining solid relationships before you need them. I wrote about this recently for IEDC, What If Trust Is Infrastructure? Rethinking Collaboration in Entrepreneurial Ecosystems.
"You have to cultivate relationships the entire time, whether you're asking them for money or not," Maria said. "I do think you're kind of in a constant fundraise, but maybe in different phases of that fundraise."
Becca framed the same principle from the other direction. When funding gets tight, the natural instinct is to protect what's yours and stay quiet about the challenges. "Scarcity mindset sets in," she said. "People become less collaborative. And I think that that's just human nature. But I think that as much as you can, focus on your mission and do what you do well, but also try and maintain your peer relationships, because you never know what might come out of it."
WEDC's willingness to be transparent about its funding crisis and bring the problem to its regional consortium rather than quietly preparing to shut down Start in Wisconsin is precisely what created the conditions for a partner to suggest a solution.
Start in Wisconsin survived because a coalition existed, relationships were maintained, and the people involved were willing to be honest about what was at stake when the money ran out.
As Ed put it: "When you're pushed against a wall, you do what you can and turn over all the rocks."
